Austin Real Estate Blog

The real estate market news remains good for the Austin area, and Texas as a whole. March foreclosure numbers for Texas are down compared to last year – down about 16 percent. The March figures also show a drop of 13 percent from February 2008. When compared to the national trend – 2008 figures show a 57 percent jump in foreclosure filings from 2007 – the Austin market is strong indeed. In fact, the national foreclosure trend continues to climb: up 5 percent in March 2008 from February 2008. Bank repossessions were up a staggering 129 percent.

In Austin, market conditions are holding steady still. Active listings are up, but so are median sales prices – about 5 percent. This makes for a market that is slightly more advantageous to the buyer as the inventory is high and the average price of a single family home has remained steady and, in some cases, actually dropped slightly.

We may be looking at the end of the nationwide slump, also, as prices seem to be bottoming out and the government reports that prices have crept up slightly recently. Inventories are still high, but the buyers have been showing interest again. The major mortgage bankers have been working to keep interest rates under 6 percent, as applications for loans are beginning to rise again. The FHA reports that applications for mortgages have jumped 3.5 percent. Freddie Mac plans to put up to 15 billion dollars into slumping markets.

While Austin has been affected in some small measure by the national real estate slump, things look to be well in hand for an imminent growth period in the next year and beyond.

A look at your bank account followed by a dreamy walk through the mall or an examination of a travel brochure, may inspire you to start saving some money. You’ll list your options in your head, determining what is feasible and what is not. When you think of refinancing, you’ll think “why not?” The rates are lower than they have been in years. Refinancing could save you money and secure you a great deal. Before you rush to your lender, know that your reasons for refinancing are far from advisable.You should never refinance so that you can go on a trip, buy a new bag or pair of shoes, or even secure a tax deduction. You should refinance so that you can get out of debt, pay off your credit cards or avoid going default on a loan. If one of those is your reason, the decision to refinance is easy. You should act immediately and get into a fixed-rate program while the rates are down.

Unfortunately, the process isn’t always as easy as the decision. A zero-cost refinance is the most desirable, but it won’t always secure you the best rates. If your home has been listed for sale before, lenders may not be willing to refinance it at all. Thus what you have to do, as with anything, is plan. Determine first if you should refinance and if you can do so without lengthening your loan; then figure out who and what will put you in the best program. How can you save money in the long run? That’s the most important question. You want not a pair of shoes but the ability to stay above the water should the economy falter and refinancing can help you do that, if you go into it with the right motivation.

You are putting your home on the market, not because of foreclosure or a similar financial downfall, but because you are ready to move. Perhaps you have been relocated or need more space; whatever the reason, the number of foreclosures surrounding you may have you a bit nervous. How are you supposed to move your home without losing a considerable amount of money and wasted effort?Planning.

You have to start smart and that involves thinking through your actions. A real estate agent will help you with that. He/she is well aware of the market’s current situation and will know how to price and advertise your house. Even with an agent, before you price it, drive around to the other homes for sale in your area. Look at their interior and exterior, and then their price. Get a realistic comparison of quality, and you’ll have an idea as to how much your house should cost. Don’t’ be tempted to under or over-price your property. Doing either will cost you profit, whether it’s because you don’t net what is deserved or buyer’s choose cheaper homes. Finally, decide how long you would like to be on the market. If you can’t afford to be there for long, you must ask for less money.

After your home is listed, be sure that everything inside is pristine. Nothing should appear broken, rundown or tarnished. You are competing with foreclosed and thus cheaper homes. Your higher price means that your interior and exterior must be perfect.

You can sell your home. It’s not impossible, and it doesn’t have to involve serious monetary loss. You simply have to think, plan and play the market wisely. There’s a buyer out there for you, who will offer what is warranted. Make sure you ask for it.

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Higher
This Week:  6.03%
Last Week:  5.88%
1yr Ago:  6.16%

15-yr Fixed - Higher
This Week:  5.62%
Last Week:  5.40%
1yr Ago:  5.87%

5/1 ARM – Higher
This Week:  5.68%
Last Week:  5.48%
1yr Ago:  5.88%

Highlight of This Week’s Major Economic Reports

Not-so-bad economic news and continued fears of inflation sparked a jump in mortgage rates this week.  This has led to many downgrading their beliefs that the Fed will cut rates much – if at all – when it meets next week.

While economic growth remains subpar, recent data shows that things may not be as bad anymore as feared.  Unemployment claims were down last week.  Manufacturing isn’t as down as it had been earlier in the year.  Overall economic activity was less negative – a possible sign that the downturn is leveling off.

On the housing front, home sales fell again in March.  Existing Home Sales fell 2% last month, while New Home Sales tumbled 9%.  The good news to these bleak numbers is that the declines were softer than expected, and the average price for existing homes did go up slightly by 0.9%.  With demand continuing to stay low, inventory remains at higher levels, but many economists expect for inventory to come back down in the not too distant future.

The relentless spike in food and oil prices (hello, $5/gal?) are weighing heavily on our checkbooks, so the government has decided to start shipping the “stimulus checks” earlier than expected.  We probably shouldn’t expect for this to do much to actually stimulate the economy, as this extra money will likely just go towards paying for gas and food.

The market has set the expectation that the Fed will cut short-term rates by 0.25% next week.  It is also anticipated that they will note stability in the financial markets and will shift their focus back to inflation – a sign that this may be the end (at least for now) to the rate cuts.  Don’t take this as bad news, however, as the Fed’s rate cut will only impact the Prime Rate.  Mortgage rates, remember, are separate and follow longer-term bond yield movement.

What to Look for Next Week

The Fed’s monthly policy meeting and the April Employment Report will be the headliners for the week.

We will likely see a 0.25% rate cut from the Fed (perhaps the last one for now), which has already been priced in to current mortgage rates.  And, many expect for the unemployment rate to tick up slightly in April.

Odds aren’t great for us to see any improvement in rates.

Short-Term Rate Outlook

Slightly Higher

Tools to Help Your Buyers & Sellers

Rates on the rise?  It doesn’t matter!  With Pre-Purchase Rate Protection from PHH Mortgage, you can protect your purchasing power with the ability to cap your interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements.  So, whether rates go up or down, you will win!

Call Marie Funston – PHH Mortgage – (512) 691-6757

If you are renting solely so that you can save money before buying a home, renter’s insurance may seem like an unnecessary expense. It may seem like an extra that while nice to have, you can’t afford. The truth is the opposite. You can’t afford not to have renter’s insurance.

If the worst should happen – a natural disaster, robbery – renter’s insurance will cover the cost of your possessions. You won’t be forced to start from scratch, which will automatically save you money. Should such a disaster destroy your rented home, many policies will pay for a temporary place to stay. Moreover, if an outside party is injured in your home, the liability coverage in your policy will protect you. You won’t have to worry about losing a sizable chunk of your income or savings. Your ability to buy a home will remain in tact regardless of the unforeseen.

When you start looking for renter’s insurance, which is what you should do immediately, don’t settle for the first policy you find. Be aware that you have options. You can get an “Actual Cash Value” policy, which will pay for the replacement of your possessions minus a small deduction, or a “Replacement Cost” policy, which completely pays to replace your items. Neither choice will extend by your policy’s limit, however. Therefore, you can get floaters. Floaters will extend the policy to cover particularly expensive items, such as jewelry, fur and computer equipment.

Whatever policy you opt to get, make sure it’s a good one. If you have shopped before settling you will know it is. Additionally know that the money you are paying now, is saving you money in the future.

Over the past several years, Tech Ridge Center, located in North Austin, has been building up. Contractors are aiming to create an area with over 800,000 square feet of retail space and approximately 500,000 square feet of office/mixed-use space. To do this, they are working in phases. Phase 1, already complete, has included the arrival of J.C. Penney and Butt Grocery, Co. Offices have popped up, and tenants have moved in enthusiastically. Phase 2 looks to be just as populated.Recently, Office Depot, Petco and Castle Dental announced that they would be setting up shop in Tech Ridge Center. Office Depot will have a 21,000 square foot store while Petco fills a 16,000 square foot space and Castle Dental takes 3,000 square feet in a multi-tenant building. All three are set to open in November as a part of phase 2. With them, phase 2 should result in the addition of 280,000 square feet of retail space. 400,000 square feet of office space has been planned as well. It will be added to the Pavillion, an office complex already begun at the center.

When phase 2 and the ensuing phase 3 end, Tech Ridge Center will be the place to work, shop and live. There’s no telling what other retailers will move in, but considering the ones that have already joined, they are bound to be reputable and worthwhile.

To find out more about Tech Ridge Center, visit www.techridgecenter.com, or take a quick drive up to where I-35 and Parmer Avenue meet and find out in person just what’s being built.

With all the excitement and innovation in building environmentally friendly facilities, even the US Army is getting into the act. Fort Hood aims to be the first Army base to construct a building to comply with the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.

In order to meet LEED’s sustainable standards, buildings are required to use 30 percent less energy and 20 percent less water than a comparable but non-green building. The building must also meet standards set by the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) for improvements in indoor air quality.

Fort Hood has already instituted an Environmental Management System (EMS), which includes educating the installation’s solders, families, and other base personnel in reducing waste and energy use while improving the quality of life. In fact, Fort Hood has already introduced recycling and reuse strategies that have saved 3 million gallons of water and a million gallons of hazardous waste.

Everyone on base is expected to be responsible for complying with the standards enacted by the US Army Environmental Command (USAEC). The USAEC provides initiatives for Army installations’ efforts to “go green” through its Secretary of the Army Environmental Awards. The competition for this prestigious award is fierce and Fort Hood was among the 2007 winners for its improvements in the environmental quality on base.

The move toward environmentally friendly building is not only the result of global concerns about climate change and rising pollution levels, but a response to a directive from USAEC mandating all new vertical building construction to achieve at least a silver level LEED standard. The buildings must meet requirements set by LEED for sustainability, energy efficiency, and air quality. Fort Hood wants to be the first to build one.

There are plenty of reasons for you to choose green alternatives when building, not the least of which are the health of the planet and the health of you. But perhaps, so far, that hasn’t been enough to truly motivate you; perhaps you need a little more incentive. Well, the state of Texas has provided you with just that, an incentive – a tax incentive to be exact.

Property owners with solar, wind or biomass power sources installed on-site are eligible for a 100-percent property tax exemption on the appraised value of the device. Installers, along with the manufacturers and sellers, are eligible for a franchise tax exemption. Corporations with said devices can deduct the item’s cost or take ten-percent of it from the company’s income. With solar, wind or biomass power sources installed, companies are also eligible for economic development credits. And that’s just for power sources. There are other incentives for other eco-friendly additions.

The next time you decide to make a change to your home or company, think green and you’ll save green. Invest in alternate energy sources and power-saving materials., and take the natural route – the one that won’t deplete the Earth. You’ll be ensuring that you, your home and your wallet are sustained longer.

For more information on tax incentives in your area, call the Comptroller of Public Account, Tax Policy Division.

In most cases, your property tax bill will be automatically adjusted if a change is deemed necessary, but that doesn’t mean you shouldn’t pay active attention to the details of your bill. Mistakes happen. Homes can be overvalued, foreclosures can be mistakenly foreseen and clerical errors can (and often do) lead to incorrect assessments. Regularly examine your property tax bill to make certain that your home has been properly described, there is no unexplainable discrepancy between the assigned value of your property and neighboring houses, and that depreciation and value-reducers in the area have been accounted for.

If you find that a mistake has been made, appeal your bill. But when you do, be prepared for a long journey. It’s going to take a lot of time and energy to guarantee the adjustment you deem warranted. To begin with, you will have to find three or more homes in your neighborhood with lower assessments. The more you get and the lower they are the better. However, this doesn’t mean you should randomly select houses just to build a case. The properties should be similar to yours in layout, size, age and improvements. Hiring a professional, such as an appraiser or real estate agent, can make this step less difficult, but it will cost money.

Once you’ve prepared your case and issued the appeal, should you lose, you can appeal to a higher authority, but before you do, make sure that it’s worth it. If you are doing this to prove a point rather than receive something you justly deserve, stop now. You won’t triumph in the end, and you will have wasted much time if not money. However, if you have examined the situation rationally and objectively and know that the adjustment is necessary, don’t give up. Keep appealing and right the wrong.

When you think of natural resources, the ones that immediately come to mind are either the ones introduced to you in elementary school or the ones constantly in the news for their depletion. You picture coal, oil, various minerals, soil and trees. You think of things that you can touch and feel, but what about a natural resource that is a little less tangible? What about gravity?

A man in Springfield, VA recently designed a lamp powered solely by gravity. The product, named Gravia, is lit by a mass that spins a rotor as it slowly falls. It turns on and off with weights that are moved from the top to the bottom of the device, and involves no cords, no noise and very little energy.  The light emitted from it is equivalent to that of a 40-watt bulb. What makes it so amazing, however, is that if used 24 hours a day, seven days a week it would last for approximately 200 years.

That definitely gives you something to think about. The one thing we’ll never run out of is gravity. It’s a constant presence on this earth, so why not use it to light up our rooms and power our gadgets?

Of course, we can’t rely on gravity to build our homes. We’ll have to look to other natural resources for that, but if we can use gravity for electricity, what can’t we use to make four walls?